92 Va. Cir. 62
Hopewell Cir. Ct.2015Background
- JAAAT Technical Services, LLC (Plaintiff), a Virginia general contractor, and Tetra Tech Tesoro, Inc. (Defendant), a Virginia subcontractor, contracted on five military-base projects (three in North Carolina, two in Georgia) containing forum-selection clauses requiring litigation in Hopewell, Virginia (Hopewell Circuit Court or E.D. Va., Richmond Division).
- Tetra Tech sued JAAAT for breach of contract in North Carolina (for the NC projects) and in Georgia (for the GA projects); North Carolina litigation relied on a statute voiding certain forum-selection clauses for contracts improving in-state property and the NC court issued a temporary restraining order.
- JAAAT then filed a declaratory judgment action in Hopewell Circuit Court seeking a declaration that the forum-selection clauses require resolution in Hopewell and moved for a preliminary injunction to stop Tetra Tech’s out-of-state suits.
- Tetra Tech made a special appearance and moved to dismiss JAAAT’s declaratory action for lack of subject-matter jurisdiction or, alternatively, for the Court to abstain; both parties argued motions in Hopewell Circuit Court.
- The Hopewell court found it could interpret the contracts under the Virginia Declaratory Judgment Act but could not enjoin or control the proceedings of North Carolina or Georgia courts; the court characterized JAAAT’s injunction request as procedural fencing and granted dismissal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hopewell Circuit Court should enjoin Tetra Tech’s out-of-state litigation | JAAAT: forum-selection clauses require litigation in Hopewell; court should enjoin NC/GA suits pending declaratory judgment | Tetra Tech: out-of-state courts have jurisdiction; injunction is improper and JAAAT has other remedies | Denied — injunction is inappropriate; would be procedural fencing |
| Whether Hopewell Circuit Court may declare that out-of-state courts lack jurisdiction | JAAAT: court can declare clause controlling and thus negate NC/GA jurisdiction | Tetra Tech: Virginia court lacks power to bind or control sister-state courts’ jurisdiction | Denied — court can interpret contracts but cannot prohibit other states’ courts from exercising jurisdiction |
| Whether declaratory judgment is proper here | JAAAT: need a pre-enforcement declaration enforcing forum clauses | Tetra Tech: claims are ordinary causes of action pending in other states; declaratory relief is an improper procedural substitute | Denied — other adequate modes of proceeding exist (defend in NC/GA) |
| Whether the Complaint should be dismissed for lack of subject-matter jurisdiction | JAAAT: asserts Virginia jurisdiction to interpret contracts and enforce forum clauses | Tetra Tech: Virginia court lacks authority to affect out-of-state proceedings; action attempts procedural fencing | Granted — Court dismissed for lack of jurisdiction |
Key Cases Cited
- Williams v. Southern Bank of Norfolk, 203 Va. 657, 125 S.E.2d 803 (1962) (declaratory judgment acts supplement ordinary actions and should not be used for procedural fencing or forum shopping)
- American Nat’l Bank v. Kushner, 162 Va. 378, 174 S.E. 777 (1934) (when rights have matured, ordinary remedies should be used rather than declaratory relief)
- Green v. Goodman-Gable-Gould Co., 268 Va. 102, 597 S.E.2d 77 (2004) (declaratory judgment is inappropriate where contested issues are properly brought as ordinary causes of action)
- Miller v. Jenkins, 54 Va. App. 282, 678 S.E.2d 268 (2009) (denial of declaratory relief where other procedural remedies exist and plaintiff can defend against pending motions)